China's economy

[DKG]

There has been a great deal of chatter in recent years concerning the prospect that America could soon be eclipsed and subordinated by communist China. However, the defeatists appear to have overlooked the very real possibility that China might collapse under the weight of its ambitions before realizing them.

While there are various problems that might hamstring the communist nation and thwart its completion of Beijing's so-called hundred-year marathon, the prospect of a doomed economy is presently the most arresting.

Although urging patience, Beijing has been racing to shore up its crashing currency amid broader economic woes, crashing banks, and failing corporate giants.

This week, Chinese state-owned banks hurriedly dumped U.S. dollars and bought up yuan in domestic and international foreign exchange markets in hopes of slowing the pace of the Chinese currency's depreciation, reported Reuters.

The yuan has reportedly lost roughly 2.4% against the dollar already this month and 6% overall since the start of this year, hitting a 16-year low relative to the greenback on Aug. 16.

CNBC noted that unlike the currencies in relatively free nations such as the U.S. and Japan, Beijing assigns a midpoint on any given day, such that if trade of the currency "deviates too far, according to some market watchers, the Chinese central bank will step in to buy or sell the currency, putting a lid on its daily volatility."

Accordingly, China's central bank, the People's Bank of China, stepped up its intervention Friday, setting an onshore yuan midpoint over 1,000 basis points stronger than Reuters' 7.3065 per dollar estimate.

This move comes just days after the PBOC lowered the rate on its one-year loans by 15 basis points to 2.5% in response to anemic consumer spending growth, sliding investment, and spiking unemployment, reported Bloomberg News.

Bloomberg noted that the economic picture is particularly bleak for China, where bank loans "plunged to a 14-year low last month, while deflation is setting in and exports are contracting," adding, "One of China's largest property developers is at risk of default and a financial conglomerate with 1 trillion yuan ($138 billion) under management missed payments on investment products, stoking fears about possible contagion."
https://www.theblaze.com/news/communist-china-is-watching-its-currency-crash-and-economy-crumble?utm_source=theblaze-7DayTrendingTest&utm_medium=email&utm_campaign=The%20Blaze%20PM%20Trending%202023-08-18&utm_term=ACTIVE%20LIST%20-%207%20Day%20Engagement

It is hard to diagnose the Chinese economy with much certainty as hard data is not available.

[DKG]

Property crisis
The property developer in question, Evergrande, filed for bankruptcy in New York on Thursday.

CNN Business indicated that Evergrande's default in 2021 was followed by several other major developers in China defaulting on their debts.

The Guardian reported that Country Garden, once China's largest property developer by value, is also poised to tumble. With well over $192 billion in liabilities and nearly four times as many housing projects as Evergrande in China, its collapse could also prove devastating.

The implosion of the real estate sector is especially problematic for China, given that it was long regarded as a growth engine for the economy and reportedly accounted for more than 30% of the communist nation's GDP.

"With financial troubles at developers such as Country Garden likely to weigh on the housing market in the near term, there is a real risk of the economy slipping into a recession unless policy support is ramped up soon," analysts from Capital Economics said Tuesday.

David Roche, president and global strategist at Independent Strategy, told CNBC Thursday that China's economic model "is clearly washed up on the beach with a huge number of legacy holes in it, and it's not going to take off again."

"They really don't have the approach to surgically get rid of bad debts and bad assets, and at the same time, they're not going to be able to rely on their traditional measures of growth. That's the big problem," added Roche.

U.S. Treasury Secretary Janet Yellen recently suggested that China's slowdown may in turn be a "risk factor" for the American economy.

Spiking unemployment
Unemployment among Chinese youths ages 16 to 24 jumped to a record 21.3% in June, up from 20.9% the month before.

This could prove to be a destabilizing affront to the young who accepted authoritarian rule in exchange for the Chinese Communist Party's promise of progressive increases in living standards.

After months of record-high unemployment figures and facing the prospect of far more damning figures, Beijing suspended the release of monthly data.

A spokesman for China's National Bureau of Statistics attributed the suspended release to a need to improve the statistics, in part by possibly removing "students looking for jobs before graduation," reported CNN.

Reaping the whirlwind
TheBlaze previously noted that China's present economic woes are compounded by the fallout of its brutal abortion regime.

Owing to the CCP's one-child policy implemented in 1980, as well as to other correlated factors such as a decrease in the number of women of childbearing age, declining fertility, and higher suicide rates in women than in men, China faces a demographic crisis.

Whereas in 1950, a year after the communists formally took power, China's fertility rate was 5.29, as of last summer, it hovered around 1.16.

Rana Mitter, professor of U.S.-Asia relations at the Harvard Kennedy School, has suggested that China's working-age population will drastically shrink over the next 15 years, meaning "technology will need to adapt to create new jobs for a smaller workforce, while providing enough growth to pay for pensions and health care for the rapidly growing elderly population."

While Mitter suggested there may be ways for China to improve its situation, it is nevertheless "laying traps for itself."

[Oerdin]

Peter Zeihan was right.  The economy in Communist China is going to shit

[Oerdin]

The fertility rate in communist China is down to 1.09.

https://www.theguardian.com/world/2023/aug/16/china-fertility-rate-dropped-to-record-low-in-2022-estimates-show

[Herman]

The fertility rate in communist China is down to 1.09.

https://www.theguardian.com/world/2023/aug/16/china-fertility-rate-dropped-to-record-low-in-2022-estimates-show

Most Asian countries are around that number.

[Herman]

Peter Zeihan was right.  The economy in Communist China is going to shit

That will be bad for all of us.

[DKG]

China is on the brink of collapse as an imminent "serious and long-term" economic crash looms but Americans won't have to suffer its impact, experts told Daily Express US.

President Xi Jinping failed to drive a successful post-Covid economic recovery which has now been scuppered by a major property crisis.

Meanwhile, Chinese exports are plummeting and consumer spending has been slashed as a crisis unfolds.

According to Hans Dau, President and CEO at strategic consultancy firm Mitchell Madison Group, a "crash" is looming as China's economy dies on its feet.

He told Daily Express US: "The China crash will happen and it's probably serious and long-term."

But luckily, the US is very well protected from any damage, he claimed.

But Prof Ivan Katchanovski warned that Americans may not come away completely unscathed.

He told Daily Express US: "The Chinese economy is slowing down following decades of very rapid growth.

"This slow down can affect major American companies which use China as its production base. It might rise prices of goods imported from China.

However, he conceded: "But the slowdown of the economy of China also lowers its demand for imported oil, which can push oil prices lower and help lower inflation in the US."

According to Matt Shoemaker, a former Defense Intelligense Agency officer who is running for Congress, the US may not have to worry about more costly Chinese-made goods after all.

He explained to Daily Express US: "The US-Mexico-Canada free trade agreement signed a few years ago that succeeded NAFTA (the North American Free Trade Agreement) ended up encouraging a lot of offshore companies that had gone overseas, especially China, to come back.

[DKG]

There is not nearly enough transparency with the Chinese economy to know with any degree of certainty how it is doing.